In re Application of Duke Energy Ohio, Inc.
967 N.E.2d 201
Ohio2012Background
- Hurricane Ike in Sept. 2008 damaged Duke Energy Ohio’s system; restoration took nine days across Ohio, Indiana, Kentucky.
- Duke sought roughly $30.7 million for storm-restoration costs; PUCO approved about $14.1 million after reductions for evidentiary issues.
- Duke bore the burden to prove costs were prudently incurred and reasonable; the Commission could disallow or reduce inconclusive evidence.
- The Commission found significant problems with Duke’s evidence, including unsupported bonus payments, questionable labor and contractor costs, and affiliate-related charges.
- Duke appealed raising five propositions of law challenging the Commission’s evidentiary reductions; the court affirmed the Commission’s order.
- Duke Energy Ohio’s recovery was ultimately reduced to about $14.1 million; the Supreme Court affirmed the order over Duke’s challenges.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether supplemental compensation to salaried employees was reasonable | Duke argues bonuses recognized extra labor by key staff | Commission found no reasonable basis for the bonus determinations | No error; bonuses lacked a reasonable basis and were not shown to be prudent |
| Whether the record adequately supports excluding certain salaries | Duke contends costs above base salaries related to restoration | Record citation deficiencies undermine Duke’s assertion | Record support insufficient; proposition rejected |
| Whether labor loaders and supervision costs were properly reduced | Duke claims reductions used an improper generalized formula | Commission relied on record testimony supporting reductions | No reversible error; reductions supported by evidence |
| Whether affiliate-related labor costs were properly disallowed | Affiliates’ labor costs should be recoverable if Duke paid appropriately | OCC showed lack of proof; Commission offset was justified | No error in reducing affiliate-related costs |
| Whether contractor costs were properly disallowed due to documentation discrepancies | Invoices showed Ohio work; documentation inconsistencies overruled recoveries | Discrepancies supported reduction; reweighing evidence not allowed | Reduction to contractor costs upheld |
Key Cases Cited
- Allnet Communications Servs., Inc. v. Pub. Util. Comm., 70 Ohio St.3d 202 (1994) (requires record citations to support factual assertions; burden on proponent of evidence)
- Physicians Comm. for Responsible Medicine v. Ohio State Univ. Bd., 108 Ohio St.3d 288 (2006) (appellate review requires meaningful record support for arguments)
- Martin Marietta Magnesia Specialties, L.L.C. v. Pub. Util. Comm., 129 Ohio St.3d 485 (2011) (clarifies weight-of-evidence standard on PUCO review)
- Util. Servs. Partners, Inc. v. Pub. Util. Comm., 124 Ohio St.3d 284 (2009) (reweighing of evidence is outside appellate function)